Sunday, November 13, 2011

Latest from: CleanTechnica

The U.S. EPA has just released test results indicating that at least one common fracking chemical has contaminated drinking water in the town of Pavillion, Wyoming. The finding is significant because the natural gas industry has long denied any systematic connection between its fracking operations and harm to water supplies, despite a growing body of anecdotal evidence. Denial has traditionally been a pretty easy call for the industry, given its exemption from chemical disclosure rules that would have definitively revealed (or disproved) any such link years ago. However, the new investigation may be only a taste of things to come, as the EPA gears up for closer scrutiny of fracking chemicals and their impacts.

Fracking and Timing

While it may be pure coincidence, the timing of EPA’s release appears to be a PR-savvy move designed to take some air out of the gas industry’s sails. On November 1, EPA issued an update on the data-gathering phase of its Hydraulic Fracturing Study report, which will attempt to get a handle on the impacts and potential risks of fracking nationwide (fracking is a drilling method that involves pumping a chemical brine underground). The final report won’t be out until 2014 but industry representatives quickly and predictably responded by accusing EPA’s methodology of being secretive and unreliable. These arguments just as quickly lost some punch just a few days later, when EPA released the results of the Pavillion investigation. That helped to focus positive attention on the agency’s credibility, through its meticulous testing and documentation of its findings.

Fracking Pollution in Pavillion, Wyoming

As reported by Abrahm Lustgarten of ProPublica, Pavillion is situated in a region of Wyoming that has seen hundreds of new gas wells drilled in the past 15 years, with 200 in the Pavillion area alone. Abrahm notes that residents started alleging a connection between the drilling and water contamination in their wells about ten years ago. Their complaints were partly borne out by EPA’s results, which revealed “alarming” levels of contamination in a Pavillion aquifer, including “high levels of cancer-causing compounds and at least one chemical commonly used in hydraulic fracturing.” However, the EPA report deals carefully with documenting the chemicals, without venturing any conclusions regarding the possible source of those chemicals.

Fracking and Earthquakes

Aside from direct water contamination, fracking can also pose a risk to water supplies through its potential for infrastructure damage. Namely, fracking has recently been linked to earthquakes, and earthquakes are not good for reservoirs, dams, aqueducts, treatment plants and water mains. Geologists are also beginning to discover that deep-ground disruptions can have far ranging and unpredictable consequences on the surface. In what could be a portent of things to come, a small lake in Pennsylvania was recently drained because of damage to its dam caused by an underground coal mine located at what would ordinarily be considered a safe distance away.

Fracking and Tar Sands

As an aside, according to Abrahm the Pavillion gas wells at the center of the residents’ problems are currently owned by the Canadian company EnCana, which continues to deny responsibility. Their experience with EnCana certainly doesn’t bode well for residents of Nebraska and other midwestern states who may have to deal with the impacts of another Canadian energy project,

Fracking and People

A while back, an op-ed writer for the New York Times argued that the benefits of fracking for U.S. energy policy far outweigh the risks, and the writer basically advised local residents to suck it up. That’s actually been the course of action until now, when fracking mainly took place in isolated and relatively underpopulated rural areas. Combined with the industry’s disclosure exemptions, that made it difficult if not impossible to assemble an accurate picture of the impact of fracking on a national scale. The situation is quite different now that a gas-rich formation of shale called the Marcellus has been discovered in and around the Appalachian region. EnCan may have temporarily patched Pavillion’s problems by hauling in a few cisterns for drinking water, but you’re talking about an awful lot of cisterns should problems arise in parts of the Marcellus, which for starters includes Pennsylvania, New Jersey, and New York.

The NY Times’ reporters singled out NRG Energy’s 250 megawatt (MW) California Valley Solar Ranch project in San Luis Obispo, opining that it was typical of “the banquet of government subsidies available to the owners of a renewable energy plant.” As it turns out, if NRG’s solar power project is indeed typical, then the US public should be in pretty good shape.

I can certainly support the Times and its reporters’ efforts to act as watchdogs of large, poltiically well-connected corporations feeding off the public trough without having any “skin in the game.” There’s always seem to be, and have been, plenty of that, most of it never covered by the press.

Unfortunately, the NY Times’ (NYT) reporters get so much of crucial substance wrong in this article that you have to wonder if political and economic bias rather than incompetence is to blame.

I’ll just highlight several of the key falsehoods and misrepresentations included in the NY Times piece that NRG corrects in its rebuttal. Those interested will find hyperlinks to the original NYT article and NRG press release above.

What the NY Times wrote:

"When construction is complete, NRG is eligible to receive a $430 million check from the Treasury Department — part of a change made in 2009 that allows clean‐energy projects to receive 30 percent of their cost as a cash grant upfront instead of taking other tax breaks gradually over several years."

The Actual Facts from NRG:

“$380 million will go to repay the DOE loan and the American taxpayer, and only $50 million flows to NRG as the equity investor in the project.”

What the NY Times wrote:

[Lawrence H. Summers warned of] "'double dipping' [of government incentives] that was starting to take place. They said investors had little 'skin in the game.'"

The Actual Facts from NRG:

The Government protected itself against this concern by ensuring that most of the money from the treasury grant received by the project has to be used to pay down the DOE loan. On the CVSR project, almost 90% of the proceeds from the cash grant will go to pay down the DOE loan.

What the NY Times wrote:

"PG&E, and ultimately its electric customers, will pay NRG $150 to $180 a megawatt‐hour, according to a person familiar with the project, who asked not to be identified because the price information was confidential."

The Actual Facts from NRG:

“The exact price is confidential, but the number quoted is significantly higher than the actual power price in the CVSR agreement. It is overstated in the article by a significant amount.”

The Ugly, Protracted Decline of Mainstream News Organizations

It may come as a surprise to some how such a highly esteemed and reputable news organization as the NY Times could publish a piece so full of misstatements and errors. Unfortunately, it seems to be more commonplace than is healthy for journalism or society.

Moreover, it’s symptomatic of mainstream media organizations that have largely squandered their credibility, along with billions of dollars and who knows how many decent jobs, to fulfill the dreams of media moguls looking to build global media empires, or at least ensure their survival by “selling out” to corporate interests at the expense of the public interest. One only has to watch any of the “business news” channels to see how transparent all this has become.

Not only that, but these moguls and entrenched managements have been abominable strategic business managers. They may be super-rich, they may be shrewd and intelligent, but astute business managers and capitalists they are not, excepting of course when it came to lining their own pockets and those of greatest use to them. They were largely blindsided by the rise of the Internet and too slow to catch on to the ramifications of digital communications technology on their businesses.

Instead they were intent on building monopolies, or at least a good chunk of an oligopoly, and took on huge amounts of debt to do so – all with the tacit approval of their shareholders. Now, we look about and see a rubble heap of failed or “walking wounded” news organizations instead of organizations aspiring to live up to the ideal of their functioning as a critical check-and-balance on the abuses of power and wealth and a pillar of a just, open, democratic society.

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